Please enable JavaScript.
Coggle requires JavaScript to display documents.
Mergers and acquisitions (Types (cross border mergers (merger between…
Mergers and acquisitions
Reasons
monopoly
one of the main reasons for mergers is the goal of partial or complete control of the market to maximize the benefits of their goods. Monopoly is banned in all developed countries, so the largest players agree and divide the market among themselves. In doing so, they merger small companies.
economies of scale
one of the main reasons for mergers is the goal of partial or complete control of the market to maximize the benefits of their goods. Monopoly is banned in all developed countries, so the largest players agree and divide the market among themselves. In doing so, they absorb small companies.
scientific developments
often companies join forces to develop new products or refine existing ones. This is also due to the fact that some prospective employees do not want to move from one company to another for personal reasons.
poison pill measures
scarer scarpers (introduction of amendments to the charter of the company that can scare away possible invaders, for example, adding an amendment requiring approval of the merger by more than two-thirds of the votes (by a qualified majority
"Scorched earth" (the implementation of actions that will make the target company unattractive to the invader aggressor, for example, selling an asset attractive to the aggressor)
Protective acquisitions (mergers by a company of other small companies to increase the cost of merger by the invader)
"Macaroni defense" (the issuance of debt obligations by the company with the condition of early repayment of the loan in case of a change in the controlling shareholder of the company.As a result, the debt obligations of the target company "swell", like pasta during cooking)
-
Types
a horizontal merger of companies - the merger of two or more companies that offer the same product in the same company. Advantages: increased competitiveness, etc.
vertical merger - the merger of a number of companies, one of which is a supplier of raw materials for another. Advantages: decrease in the cost price of production, increase in profitability of production;
-
generic (parallel) mergers of companies - the association of companies that produce interconnected goods. For example, the association of a company that manufactures computers with a company that produces computer components. Advantages: Concentration of the technological process of production within one company
conglomerate (circular) mergers of companies - the unification of companies that are not connected with each other by any production or marketing relations. The benefit of such a merger is not obvious and depends on the specific situation;
Examples
-
in 2013, Microsoft merged the company Nokia. The management of Microsoft hoped to reanimate the phone giant, but due to incorrect pricing and poor advertising, Nokia brought only losses to Microsoft
For successfully merging the company- buyer must be sure that the region is interested in its product. Before acquisition, you need to arrange the correct advertising company, in order citizens of this or that country would be aware of the new product. Also, do not forget about the cultural differences between managers and subordinates. Also, you need to adjust to the type of management that was in the company under the old CEO and managers